M Macys Inc

Ross Stores Inc. posted stronger-than-expected results for its latest quarter, defying mounting concerns for the wider retail sector, as same-store sales eclipsed company forecasts.

Ross posted a 4% climb in same-store sales, well above the 1% to 2% range predicted by the chain and the 2.1% climb analysts on FactSet had expected.

The stronger quarter led the discount retailer to raise its annual earning guidance to a range of $2.69 to $2.75 a share, up from a previous forecast of $2.63 to $2.72.

Shares of Ross Stores, which have climbed 12% over the past year, rose 2.8%, to $64.65, after hours.

For the current quarter, Ross projected same-store sales would climb between 1% and 2% with earnings on a per-share basis in the range of 52 cents and 55 cents, while analysts surveyed by Thomson Reuters estimated 57 cents. For the fiscal fourth quarter, comparable sales are expected to climb between 1% and 2% with earnings between 73 cents and 76 cents, while analysts expect earnings toward the low end of the range.

Retailers have struggled to keep pace with the growing reliance of consumers on online venues. While Amazon.com snatches market share, outlets such as department store giant Macy's, which recently announced plans to shutter about 15% of its stores, have grappled with declining foot traffic.

Ross, however, appears to be among the companies bucking the trend. Fellow discount retailer TJX Cos., the parent of T.J. Maxx and other off-price chains, reported Tuesday a 4% sales increase at existing stores while adjusted earnings per share were stronger than expected.

For the second quarter ended in July, Ross Stores said its profit grew to $281.9 million, or 71 cents per share, up from $258.6 million, or 63 cents a share, a year earlier. The company had foreseen earnings in the range of 64 cents to 67 cents, while analysts expected the upper-limit of that range at 67 cents.

Sales rose 7.2%, to $3.18 billion, above the $3.13 billion projected by analysts surveyed by Thomson Reuters.

Revenue recaptured momentum in this latest quarter. Sales had grown over 7% on a year-over-year basis each quarter dating to the July period in 2015 until slowing to 5.1% growth in the prior quarter.

During the second quarter and first six months of fiscal 2016, Ross repurchased 3.1 million and 6.2 million shares respectively. The company plans to buy back a total of $700 million in common stock during fiscal 2016 to complete a two-year $1.4 billion authorization.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

(END) Dow Jones Newswires

August 18, 2016 18:15 ET (22:15 GMT)

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